That's a subsidy to purchase the car, not manufacture it. The current US system just increases EV car total demand, it doesn't lower the production costs of the cars themselves.

I don’t get the practical difference, sorry. I’m happy to learn but it seems like six vs half dozen to me. Either way you’re subsidizing the car pipeline.

I feel like China is up and coming and the west is scared and performing knee jerk reactions rather than effective governing around this change in dynamic.

You still have to borrow money to: start the car company, pay yourself, pay workers, build a factory, get raw materials, design a car, then manufacturer and sell it before that $7,500 subsidy kicks in. Compious amounts of subsidy earlier in the pipeline makes it substantially easier to do all the of above steps. How much easier would it be to start a company if your salary and the salary of the employees was paid for by the government before you ever made and sold a product?

so it's six of one now, vs a half-dozen later, except that you have to get to later to get the half dozen, and there's no guarantee you'll get there.

Difference is - if manufacturing would be subsidized, then such company could export cars subsidized by US taxpayer, without tax payer seeing any benefit for US

This argument makes the most sense to me, thanks. Hopefully American auto manufacturers will get a clue and build smaller cars. You could have several in-town ranged compact cars from the batteries and resources used for one EV Hummer, for instance.

>That's a subsidy to purchase the car, not manufacture it.

It's a subsidy for the manufacturer, as the manufacturer sees you got a credit from the government, and simply raises prices accordingly. Done as a way to meet demand and ensure the manufacturer works for the money.

This is also fundamentally why college and house prices keep going up, as the government subsidizes student loans and mortgages, and so colleges and such simply raise prices.

> Aren’t electric cars in America subsidized by at least a 7500 dollar tax credit

Yes, which is bad in my opinion, however subsidies in the form of US tax breaks stimulate US consumption it doesn't distort foreign consumption significantly, but also major foreign consumer markets put tariffs on US vehicles imports anyway for the same reason we are doing so.

That makes sense, thanks. I would still prefer American companies get onboard with tiny electric cars rather than the massive electric trucks happening. This is like the 70s all over again with the gas crisis and American auto manufacturers being caught out.